The Failure Transformation

While reading Carol Dweck’s enlightening book Mindset I came across the following phrase:

Failure has been transformed from an action (I failed) to an identity (I am a failure).

As traders I suppose we’re all susceptible to falling into this transformation trap since we so frequently face failure, particularly in the beginning stages of our venture.  At times failure flows from mistakes of self-mastery.  Other times it stems from errors in market mastery.  Regardless of if it is your constant companion or merely an occasional visitor, you mustn’t let failure define you.

Contrary to the transformation that is apparently taking place, failure is and always will be an action.  Sadly, those who embrace failure as their new identity usually end up abandoning the trading arena as a hopeless endeavor and are later left to wonder what could have been.  Unfortunately, the simple acknowledgement that failure is an action doesn’t preclude you from the inner conflict that arises following the occasional trading blunder.  Self-doubt will still attempt to proclaim you an idiot… as if your self-worth or the final judgement of success could rest on one trade.

The recovery period from trading failures is also much longer for traders who mix-up the action/identity definition.  Those who become one with failure will be plagued by indecision and much slower on the trigger when future trading opportunities arise.  In case it wasn’t obvious, that’s no bueno.

So next time you’re tempted to relegate yourself to the house of failure, don’t!  It’s an action to be overcome, not an identity to be worn ad infinitum.